As the fourth largest city in America, Houston had a workforce to match its sprawling size, with 22,000 municipal employees working in 26 departments, each with its own payroll system. Adding to the administrative challenges, time and attendance was tracked in mostly manual systems, which led to abuse, error and inefficiency.

Don Pagel, a deputy director in the mayor's office, knew the city also faced risks in non-compliance with family leave and other regulations. In this video from the recent HR Technology Conference in Las Vegas, Pagel explains how automation through Kronos workforce management technology slashed administrative costs and helped Houston manage workforce reductions during an unprecedented budget crisis brought on by the recession. Pagel also explains the challenges of integrating with SAP''s payroll module and how predictive analytics will soon bring further improvements.

Don, can you tell us a little bit about what the situation was that you were facing in your time management situation?

Don Pagel: We had a situation in the city of Houston of 22,000 employees that were on [an] exception pay system. Which basically means that [they were] only turning in the exceptions to the normal pay whether they were hourly or not. This was causing a fairly substantial, fair-relations act issue through the city. On top of needs to save some money during the financial crisis, in '10, '11 or '12, we looked to Kronos to find solutions for these kinds of problems and build a method that would allow us to track our employees by the minute, and allow the managers and supervisors to manage the resources of their employees' time and focus.

Can you explain the system that you put in place, including the hardware? I understand there were time clocks and of course, a lot of network software also.

Pagel: We chose to use a cloud implementation using Kronos' cloud services. We installed 250 time clocks from around the city, but, with as many employees as we have that have personal computers assigned to them, we also used a Web-based application for clocking in and clocking out for those employees, [about 13,000 of whom] were assigned computers.

I understand that there was some integration with SAP Payroll; can you describe what that process was like? I think there was a little bit of a difficulty in getting that done, right?

Pagel: It was important to us to find a vendor that had certified interface capability with SAP. SAP is a very wonderful system, but a very complex system. So, building interfaces with it can be a challenge. We were able to find an SAP vendor that created those interfaces for us, and they've worked very well ever since then.

You've seen some significant savings in payroll processing, and I think in also in actual labor costs. Can you describe some of those?

Pagel: We're seeing somewhere in the neighborhood of seven to nine million dollars a year in savings overall. That includes overtimes savings, paid time off [and] reductions, as well as [an] increase in [paid] time off because we're tracking it better. Which, for a city government, allows us to reduce our liability, because that paid time off accrues over a lifetime, a total career. It can be very expensive, considering when an employee retires.

So, predictive analytics is one of the major features that you're planning to put in place in the next six months. What do you hope to get from that, and how is that going to work?

Pagel: We're very excited to have some of the Kronos analytics capability. That gives us the ability to see historically in a dashboard type of environment, but [also] what has been happening in our cost center, right down to the individual. It also gives us the ability to have predictive analytics for the future. So, a simple example of that would be having a trigger for a supervisor [who] has employees who are about to exceed their overtime for the week and give them the information they need ahead of time, so that they can actually send employees home early if they don't need them on the job.

Are there any lessons learned that you would like to share with other folks in a similar position or people in IT departments who might be thinking of putting in a really large time system like this?

Pagel: Change management and project management are the biggest keys. You can have a great piece of software with lousy change management, lousy project management, and end up with a lousy piece of software. But if you combined really good software with very effective project management and change management capabilities, you will end up with a really phenomenal project. We were happy with the team that was put together to put our implementation together.

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